Oil Achieves Longest Winning Streak Since October As Omicron Fears Evaporate

Meanwhile, one analyst predicts oil prices at $200 over the next five years: File Image/Pixabay

Friday’s crude trading provided further evidence that 2022 is indeed a happy New Year for oil, with West Texas Intermediate closing up 2.1 percent and the commodity posting the fourth straight weekly gain, the longest winning streak since October.

WTI rose settled up $1.70 at $83.82 per barrel, while Brent settled up $1.59 to $86.06 per barrel, contributing to a near-complete clawback of losses incurred late last year due to media-fuelled fears about omicron leading to widespread demand destruction.

Rob Haworth, senior investment strategist at U.S. Bank Wealth Management, said, “The picture for oil is getting better because people are looking past the omicron variant and looking to reopening and a rebound in activity, much like we saw coming out of August.”

Another bullish sign was reported on Friday with the first few days of 2022 having seen almost 500,000 contracts added to the oil market, according to Bloomberg; that’s the equivalent of almost half a billion barrels, and the fastest increase since 2019.

In other oil news on Friday, sources told media that China will release crude from its national strategic stockpiles around the Lunar New Year holidays that begin on February 1, as part of a plan with other countries to reduce global prices.

As for the U.S.’s on going bid to reduce prices at the pump, the U.S. Energy Department said it had sold 18 million barrels from its strategic oil reserves to six companies, including Exxon Mobil and a unit of refiner Valero Energy Corp.

The question on Friday in the wake of another bullish trading session seemed to be, how high can crude prices go?

As far as Doug King, head of the Merchant Commodity Fund, is concerned, oil could reach a massive $200 per barrel within the next five years; he said, “We believe in structural supply-side commodity inflation that most will not have ever seen - the highest since the 1970s.

“Only OPEC will react to price metrics and they are undershooting every month.”